5 Mistakes Small Business Owners Can Overcome
When interviewing growth acceleration service clients about their business, Florida SBDC at USF certified business consultants ask, “What are your most important duties?” Typical responses include
- setting the strategic vision for the company,
- motivating personnel,
- establishing tactics to be used in the business,
- developing the next level of leadership for the company, and
- improving the operational and financial performance of the business.
In other words, their most important duties involve working on the business.
Then they ask, “What takes up most of your time?” Rarely do the answers match. Typical answers include
- doing the sales,
- dealing with employee questions and problems,
- keeping the accounting records for the company,
- handling customer complaints,
- buying merchandise for the company, and
- filling in for absent employees.
In essence, the owners are working in their business.
Why do business owners spend so much of their time on tasks that do little to contribute to the future growth and performance of the company?
“If you spend all your time working in your business, the odds are you are not going to become all that you can be,” Jim Parrish, growth acceleration services director, said. Parrish lists five primary tasks that get in the way of small business owners taking their business to the next level, and how to overcome them.
1. Inability to Hire, Train, & Motivate Staff
The inability to hire, train and motivate staff leads to high error rates, which takes up too much of an owner’s time. “You find that instead of producing sales for your company to make money, you’re spending time retraining employees and constantly going in and correcting their work and dealing with their mistakes,” Parrish said.
Hiring qualified employees is often a time-consuming process. Owners often hope to just plug an employee in and watch them hit the ground running. Many business owners lack any knowledge or training on how to hire, train, and motivate employees. They frequently take those skills for granted, assuming it is just a matter of common sense. Therefore, they will ignore the personality traits and learning capacity of the candidates. In addition, many owners are not good motivators. They believe providing a paycheck should be sufficient motivation for people to not only meet but exceed the owner’s expectations. Yet for many people, receiving a paycheck would cause them to only meet the minimum expectations of their employer. These people need additional motivation to achieve exceptional performance.
Overcoming It: Parrish said, “Educate yourself by taking classes in human resource management. Even if it’s going out and getting HR for Dummies – it gives you very basic tools and policies, as well as makes you aware of legal issues.”
In addition, he recommends developing a hiring checklist and questionnaire to be used in the hiring process for each job position and including questions designed to determine personality traits and learning capacity.
After finding the right candidate, train and develop them. Provide paths for future advancement within the company. Develop and implement programs designed to incentivize and motivate your people. Reward people not only based upon their performance but the overall performance of the company.
2. Inability to Communicate
“In the business world, we’re trying to create a vision or a mission of what we’re trying to accomplish,” Parrish said. “It’s easy to see that in your head as the owner but the trick is communicating in a fashion that your employees are getting the same vision.”
If employees do not truly understand the vision and mission of an organization, they may not be communicating things that the owner needs to know. You need that feedback from employees to ensure that you’re meeting the demands of the market, because they are that line person in front of the customer. In addition, employees who feel empowered can have suggestions on what it is you need to do to improve the operations of the business.
Owners may tend to blame the employees for the resulting confusion and ineffectiveness. Yet, the problem may truly exist because of the owner’s inability to provide clear, concise and precise directions.
Overcoming It: Parrish recommends business owners focus on learning how to speak in a variety of situations. “While you can take classes, my number one recommendation is join an organization like Toastmasters,” he said. Learn how to communicate in a clear, concise, and precise manner. Remember, when there is confusion, it is probably your fault.
3. Avoiding the Use of Professionals
“When a business owner starts their business they have a tendency to do everything themselves, including things they’re not very good at, like financials,” Parrish said. The most common example is the avoidance of using outside professionals for certain services such as accounting, web site design and maintenance, social media, and legal.
So the owner spends an abnormal amount of time doing tasks for which they are ineffective or inefficient instead of performing their more important responsibilities. In truth, professionals that do these are fairly inexpensive and owners can then concentrate on things that drive revenues.
Overcoming It: After doing a cost versus benefit analysis, where appropriate, use outside professionals in order to allow you to spend your time on the most important things necessary for the long-term economic health of the company. Parrish also recommends installing an advisory board. “There’s always a different way of looking at things and you need to know about them, even if you don’t agree with them, and account for them in the design of your business.”
4. Too Much Time Spent on the Wrong Things
Business owners are under constant pressure from the demands for their time by their customers, suppliers, employees, and other parties. Frequently, they are asked to solve problems or provide answers. Sometimes, they overly control things. They may not delegate any authority to make decisions.
“This is a matter of the squeaky wheel,” Parrish said. “You go in and throw some axle grease on it and you never really figure out why it’s squeaking. Eventually, it falls off.”
Business owners have a tendency to focus on the immediate crisis. They may work on the situation that is in their face regardless of its importance while completely ignoring the actions necessary for the future economic health of the company. At the end of the year, they haven’t gotten any better at their business.
Overcoming It: Parrish recommends that every business owner takes 15 to 20 minutes out of every day to sit down with their key advisers and ask, “What can we do today to make more money than we did yesterday?”
“This, to me, is the biggest secret in being a successful entrepreneur,” he said. “Having a clear sense of vision and taking a regular amount of time daily to think about that vision.”
In addition, owners need to prioritize their duties based upon importance, amount of time required to complete, and potential for delegation.
5. Lack of Trust
“It relates back to all other issues in the business,” Parrish said, regarding lack of trust. “Lack of trust basically means the person who lacks trust becomes less productive because they’re spending so much time checking on what other people are doing.” Some owners spend an inordinate amount of time attempting to oversee and control their employees. Basically they do this because they do not believe employees can be trusted to meet their expectations.
They may have developed that belief from their own life experiences and disappointments. Often this belief was developed due to the owner not having the ability to adequately communicate and/or motivate people. Yet, those owners will rarely consider themselves to be at fault. They find fault with others.
Overcoming It: “You’ve got to give trust to get trust at the end of the day,” Parrish said. Get good at hiring, training, and developing quality people. The hiring process is a key ingredient to this equation that is often overlooked. “I believe you hire based on intellectual capacity, personality traits, how easily motivated they are – put less emphasis on experience,” Parrish added.
Improve your communication skills and learn how to motivate people. Give people a learning opportunity. Remember that most people learn more from their failures then their successes. So don’t write your employees off because once they failed. The lessons they learned in failure may allow them to exceed your expectations in the future.
“You have to understand what motivates people – people learn in different ways and approach things differently,” he said. “In managing human resources, it’s all about finding out what they’re hot button is. What is the thing they get excited about? If you do a good job of training people and giving the an opportunity on the front end, knowing that they’re going to need a significant amount of hand-holding, those are the people who can become your superstars.”